This follows up on my 9/1/05 report, "The New York Times and Forest City Ratner's Atlantic Yards: High-Rises and Low Standards: A Pattern of Inadequate, Misleading, Mostly Uncritical Coverage." The report (link below) analyzes Times coverage of the proposed $3.5 billion project, the largest ever in Brooklyn, to build a basketball arena plus at least 16 high-rise buildings. Here I analyze further coverage of the project and also provide my own reporting.

Friday, September 09, 2005

Field of Schemes on Ratner's $100 million bid and the IBO report

Neil deMause, on his Field of Schemes site, wonders "Net loss or Net gain?" pointing out that Forest City Ratner's $100 million bid for the MTA railyard is less than the $150 million offered by rival Extell and far less than the lands appraised value of $214.5 million.

DeMause also deconstructs the Independent Budget Office (IBO) report, which predicted the arena would be economically successful. He notes: First of all, the IBO's conclusions result primarily from assumptions of how many current Nets fans would accompany the team from Jersey to Brooklyn, bringing their sales tax dollars with them - assumptions that, according to the IBO report, were provided by Ratner himself... Tweak the assumptions to have only 30% of Nets attendance represent new spending instead of 50%, and the arena would be a net loss.

Finally, while the IBO deducts the $224 million in direct cash subsidies (plus sales- and property-tax deductions) that the arena would get from the city and state, the actual public subsidy would be significantly greater - more like $451 million according to my estimates, though that could go down a bit once Ratner's increased bid is taken into account. Needless to say, tacking on an extra $227 million in costs would turn a $107 million windfall into a whole mess of red ink - so don't enter that "slam dunk" in your scorecard just yet.